The CEE economies showed convincing signs of recovery in 2010 and the more
supportive macroeconomic environment translated into some improvement in
household financial conditions, even if the propensity to save continued to
prevail over that to consume.
The development in household financial conditions in early 2011 looks also
promising but is confronted with a growing number of challenges. The recent
increase in food and energy prices is an issue to monitor as are the related
downside risks on economic activity. Austerity programmes and policy initiatives
concerning pension systems also deserve careful monitoring in some
countries.
With economic recovery gaining momentum, further normalisation in
labour market conditions and consolidation is expected in the growth of household disposable
income to remain the key drivers for the accumulation of net financial assets
over the next couple of years. At the same time, the gradual improvement in job
market conditions and more solid income growth should also support some
resumption of household debt appetite.This summary of the 2011 forecast is extracted from a 52 page report from one of the big European banks with special insight in the Central and Eastern European markets.Bulgaria, Croatia and eight other countries in the region are thoroughly analyzed from a household and consumer perspective. Two areas are particularly addressed: House price developments and the CEE labour market.Members can download the full report here.